My Children Will Do it Differently

As a parent I worry about a lot of things. My kids’ health, if they’re dressed warmly enough, if they’re eating a balanced diet. Whether they’ll be accepted into the right school and how I’ll manage the carpool run. Who their friends are. What musical instrument they’re going to play. And so on and so forth.

But I especially worry about their financial futures. I’ve read in a number of places that my generation (I was born in 1974) is the first that won’t automatically have a better quality of life than their parents. And our children will have to struggle even more than we will. Now whether or not these statements are true, I’m not sure- the point of this post is not to debate them.

Without worrying about the state of social security (in France or the United States) or long term job security or any other external factors, I’d also like not to have to worry about how my children are going to handle their own finances. I believe that like so many other things, frugality is a learned behavior. This is good, as in many ways I’m pretty frugal. But it’s also bad, because in many ways, I’m a spendthrift!

What I would like is for my children to do it differently than I did: to have an easier time of it, if you were. To be less bogged down in student loan or consumer debt. To be able to resist the temptation to buy that shiny new toy. To be able to balance their checkbook and budget their income. And finally, to recognize the importance of saving, from a very young age.

As with anything else, the best way to transform a desire into an action is through a plan of attack. Therefore this week we’re starting the oldest two on an allowance. We’ll be helping them allocate their money into three accounts: spend it now, and short term and long term savings. I hope that this will be a good first lesson in becoming more then almost frugal!

Do you believe that good financial management and frugality are learned behaviors? How can one best help kids to become financially reasonable adults?

And don’t forget to come back to tomorrow’s Share this Thursday to leave links to any posts you’ve written on the topic.

I believe frugality is typically a learned behavior. And, I believe the best place to learn that is in the home. I was sheltered from financial teachings; my parents are products of the depression and they never discussed money. Unfortunately that meant I had to learn some tough financial lessons in my early adult life. As parents it is our responsibility to teach our children about financial responsiblity before they leave the nest. We discuss money (both theirs and ours), we involve them in spending decisions (to a degree) and now that our oldest has a part-time job, we’ve helped her create a spending plan.
I worry the most about how my girls will be able to pay for their college education. We have college funds set aside but I know it won’t be nearly enough considering that a university just an hour away is $4700 this semester for tuition alone — that’s just to take classes — no books, no room & board, etc. Makes me wonder what that will be when my girls begin college in 2011 and 2014. I don’t want them to be in the group that leaves college with $50,000+ debt.

I believe that good financial management is for the most part learned. I think that one of the best things parents can teach their children is to be responsible with their finances and to be frugal.

One of the best ways to do this, I believe, is by not letting your kids have everything they want, even if you can afford to give it to them. It’s important for them to know they can survive without having all they desire.

I think this is the problem with a lot of kids today. They were given so much as children because their parents could afford it and now, they’re out on their own, don’t make the kind of income their parents did, and don’t know how to cut back and do without some things. This is where credit card problems and excessive loans become a major problem.

Your idea for teaching your children sounds great. It is super important to teach kids to save. It’s all about forming a habit.

I worry about the same things. My first 6 years of marriage have been full of financial struggle. We’re on our way out but it’s still going to be a little while. Oh how I’d love for my daughter to avoid that all together. We’re going to do our best to teach her the value of saving and avoiding debt. My daughter is young still so I’d love to hear more on this topic.

Yes, BUT children have a way of wanting to do things their own way. The instilling of values is very important, and it definitely has an effect, but you can be certain that they will want to do things a little different from the way you did, and even a little differently from the way you would have WANTED them to do things. Think about it: much as you loved and respected your parents, didn’t you have different ideas about how you wanted to lead your life than they did?

If I had to speculate, I would guess that all three of your children end up at different points on the frugal/spendthrift scale. I wouldn’t speculate as to which will be where, but I suspect they will each have their own takes on things–and, much as you might want them to make the “right” decisions, I’m sure you’ll agree that independent thinking is generally a good thing.

I grew up in a large family. We didn’t have a lot of “things” growing up. My parents didn’t have money to spend on toys/entertainment. They spent time with us. I think a lot of people feel they are entitled to have “things”nowadays. I grew up if you don’t have the money you don’t need it! And we didn’t watch very much tv…I think media thinks we need all these gagets that just clutter up our lives.
My parents didn’t have money for my college, my husbands parents didn’t have money for his college…we worked our way through college. I think teaching kids about a good work ethic goes hand in hand with money management.
In our household we look at, how many hours do I or my husband need to work in order for us to purchase some or our wants and then we ask ourselves is it worth that time?
Lead by example.

Growing up my parents completely financially supported me and in college, but never spoiled me. I had allowance and had to budget and learned the value of money. I appreciate it especially now and think that the behavior can be learned.

I believe that frugality is absolutely a learned behavior. The only problem comes when kids feel deprived from their parents’ frugality (usually when it’s a necessity) and so they knee-jerk to the other end of the spectrum.

But growing up as a kid of a frugal parent, I absolutely inherited it. I think the trick comes in finding the balance between teaching your kids the value of a dollar and not making them feel that money is the only real form of security, which can lead to severe money-anxiety.

I’m from a family of twelve kids so if frugality were entirely a learned behaviour then my siblings and I should have similar approaches to money & lifestyle choices … we don’t! I think personality comes into play. I see huge differences in my oldest two children as well. Having said that, my husband and I believe in doing our best to share our values with our kids to help them grow up financially savy (for example, what it is really like to try and pay off $50,000 in student loans). Something I’ve observed with our kids is that because they receive allowances, we never hear whining when shopping. They know that if they want something, the answer is “yes… when you save for it.” From an early age they understand this.

I grew up in a family where, one minute we were middle class, and the next minute, my father became disabled and my mom fought to keep us from losing our home. She was the ultimate frugalist. I didn’t much care for the lessons in frugality when I was growing up, but I appreciate them now. I am proud to say that my parents didn’t contribute a dime to my education. I also didn’t get many Pell Grants, so it was all on me.
My daughters are 4 and 6 and each earn allowance based on responsibilities and expected behaviors. On Sundays, they divvy up their money in their “Savvy Pig” banks they got for Christmas. There are 4 compartments; one each for, spend, save, invest and donate. While I don’t want them to worry about money, I want them to respect the value of earning a money and being self-sufficient.

I think there is much of it that is learned from parent example, but kids must also learn from their own experiences. Luckily, it’s possible for that to happen while they are still young and can “afford” to make mistakes. By that I mean that kids learn valuable lessons when they purchase something they later decide wasn’t worth it (and often parents know this will be the case) or when they save for something they want (i.e. a car or a new outfit, not necessarily something more abstract like college or “the future”), or when kids are in charge of paying for their own cell phone bill or a portion of the car insurance once they reach driving age. Unfortunately, sometimes kids will make these mistakes over and over again and not really learn how to manage their money until they are well into their 20s. Some just need more personal “experience” than others to get it. How else can you explain it when two children come from the same background and family, yet have very different spending habits?

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